Munich Personal RePEc Archive

Resolving the Halperín Paradox: The

Terms of Trade and Argentina’s

Expansion in the Long Nineteenth

Century

Francis, Joseph A.

August 2014

Online at https://mpra.ub.uni-muenchen.de/57915/

MPRA Paper No. 57915, posted 19 Aug 2014 01:39 UTC

Resolving  the  Halperín  Paradox:

The  Terms  of  Trade  and  Argentina’s  Expansion

in  the  Long  Nineteenth  Century

Joseph  A.  Francis*

Argentina  Working  Paper  1

August  2014

www.joefrancis.info

Abstract

Since the pioneering work of Tulio Halperín Donghi, historians have tried to ex-­‐‑plain why Argentina experienced a dramatic pastoral expansion in the first half ofthe nineteenth century even though there were no price incentives for increasingoutput. Here this ‘Halperín paradox’ is resolved by correcting the methodologicalerror that underlies it. Halperín Donghi made the mistake of looking at the nomin-­‐‑al prices of Argentina’s exports in Britain, whereas he should have looked at theirprices in Argentina deflated by the prices of the country’s imports – that is, itsterms of trade. When this methodological error is corrected, a massive term-­‐‑of-­‐‑trade boom can be seen from the 1780s through to the First World War. It is likelythat Argentina’s terms of trade improved by at least 2,000 percent over this period,so there were considerable price incentives for the expansion on the Pampas. Withthe Halperín paradox resolved, future research should look less at the Pampeanzone and more at the effects of the terms-­‐‑of-­‐‑trade boom on the relatively land-­‐‑scarce  regions  of  the  Interior.

Creative Commons

* This paper draws on my doctoral research at the London School of Economics’ EconomicHistory Department. That research was partly funded by the United Kingdom’s Economicand Social Research Council. Useful comments were kindly given by Sally Holtermann,Cristobal Kay, Colin Lewis, Chris Minns, and Ricardo Salvatore. An accompanying work-­‐‑book  is  available  online  at  h^p://www.joefrancis.info/data/Francis_Arg_tots.xlsx.

Resolving  the  Halperín  Paradox:

The  Terms  of  Trade  and  Argentina’s  Expansion

in  the  Long  Nineteenth  Century

Joseph  A.  Francis

This paper demonstrates that there was a massive improvement in Argentina’sterms of trade from independence up to the First World War. In doing so, it cor-­‐‑rects a major methodological error in the existing literature. Historians havepreviously tended to look at absolute rather than relative prices, often drawingthem, moreover, from the core countries, rather than from Argentina itself. Thispaper argues that this methodological error is at the heart of what can be calledthe ‘Halperín paradox’ – that is, the question of why Argentina’s expanded sodramatically in the long nineteenth century despite a lack of price incentives.Here it is demonstrated that once Argentina’s terms of trade are correctly meas-­‐‑ured, this apparent paradox is resolved, as there were actually clear priceincentives  for  the  expansion.

Tulio Halperín Donghi first noted the paradox in two influential essays onArgentina’s pastoral expansion in the first half of the nineteenth century.1

Examining the nominal prices of River Plate hides and tallow in Britain, hefound that they rose somewhat after independence in 1810, but then experi-­‐‑enced a ‘slow but very prolonged fall’ from the mid-­‐‑1830s onwards,2 preciselyas exports from Buenos Aires took off. This led Halperín Donghi to concludethat the pastoral expansion was not due to price incentives because, as he put it,his numbers ‘perfectly demonstrate the economic climate in which pastoral pro-­‐‑duction occurred in the whole River Plate area (and, for that reason, also in thecountryside of Buenos Aires); [it was] a production that did not receive its stim-­‐‑ulus,  nor  see  its  momentum  hampered,  by  movements  in  prices’.3

Following Halperín Donghi, historians have a^empted to explain whyArgentina’s expansion occurred despite falling prices. In the words of one majorsurvey, the problem became to ‘explain the paradox posited by Halperín

1. T. Halperín Donghi, ‘La expansión ganadera en la campaña de Buenos Aires (1810-­‐‑1852)’,Desarrollo Económico, 3:1/2, 1963; and idem, ‘La expansión de la frontera de Buenos Aires(1810-­‐‑1852)’, in A. Jara, ed., Tierras nuevas: Expansión territorial y ocupación del suelo en América(siglos  xvi-­‐‑xix),  México,  DF,  1969.

2. Halperín  Donghi,  ‘Expansión  de  la  frontera’,  p.  82,  my  translation.3. Halperín  Donghi,  ‘La  expansión  ganadera’,  p.  61,  my  translation.

Donghi more than thirty years ago: the great boom in the ranching economywas achieved during a time of declining export prices’.4 Halperín Donghihimself concluded that it occurred because Argentine capitalists were pushedout of commerce by the arrival of British merchants, so they instead invested inpastoral activities.5 The problem with this explanation is that there was noBritish monopoly of commerce, and both creole and Spanish merchantsremained heavily involved in trade long after independence.6 As an alternative,Samuel Amaral suggested that the expansion was due to the rise of the estancia,which was a particularly efficient way of organising pastoral production.7 Ale-­‐‑jandra Irigoin then suggested that the expansion also occurred because mer-­‐‑chants  began  to  invest  in  land  as  a  hedge  against  civil  war-­‐‑induced  inflation.8

Such explanations become unnecessary once the terms of trade areexamined. To be clear, what are being referred to are technically known as the‘net barter terms of trade’ (NBTT), which are the ratio of a country’s exportprice  index  (Px)  to  its  import  price  index  (Pm).  They  are,  then,  calculated  as:

NBTT$=$Px

Pm

When this ratio goes up, the terms of trade are improving; when it goes down,they  are  deteriorating.

This paper’s main finding is that Argentina’s terms of trade improvedmassively over the course of the long nineteenth century. Even those scholarswho have previously observed an improvement have failed to recognise themagnitude of the terms-­‐‑of-­‐‑trade boom because they have used prices from thecore countries as proxies for prices in Argentina itself.9 In doing so, they haveintroduced a major downward bias into the trend of their estimates due to thesubstantial convergence that occurred between prices in Argentina and the core

4. R. Salvatore and C. Newland, ‘Between Independence and the Golden Age: The EarlyArgentine Economy’, in G. della Paolera and A.M. Taylor, eds., A New Economic History ofArgentina,  Cambridge,  2003,  p.  22.

5. See Halperín Donghi, ‘Expansion ganadera’, pp. 72-­‐‑73; and idem, ‘The Buenos Aires LandedClass and the Shape of Argentine Politics (1820-­‐‑1930)’, in E. Huber and F. Safford, eds.,Agrarian Structure & Political Power: Landlord & Peasant in the Making of Latin America, Pi^s-­‐‑burgh,  1995,  p.  42.

6. K. Robinson, ‘The Merchants of Post-­‐‑Independence Buenos Aires’, in M.L. Moorhead andW.S.  Coker,  eds.,  Hispanic-­‐‑American  Essays  in  Honor  of  Max  Leon  Moorhead,  Pensacola,  1979.  

7. S. Amaral, The Rise of Capitalism on the Pampas: The Estancias of Buenos Aires, 1785-­‐‑1870, Cam-­‐‑bridge,  1998,  esp.  ch.  1.

8. A. Irigoin, ‘Inconvertible Paper Money, Inflation and Economic Performance in Early Nine-­‐‑teenth  Century  Argentina’,  Journal  of  Latin  American  Studies,  32:2,  2000.  

9. Most notably, C. Newland, ‘Exports and Terms of Trade in Argentina, 1811-­‐‑1870’, Bulletin ofLatin American Research, 17:3, 1998; C. Newland and J. Ortíz, ‘The Economic Consequencesof Argentine Independence’, Cuadernos de Economía, 38:115, 2001; and Salvatore andNewland,  ‘Between  Independence’.

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during the nineteenth century.10 This paper partially corrects that bias by usingprices from Argentina itself for exports, resulting in what can be called ‘part-­‐‑proxy’ estimates of its terms of trade. With some adjustments made for priceconvergence on the import side, they suggest an improvement of at least 2,000percent from the 1780s through to the first decade of the twentieth century.There  were,  then,  massive  price  incentives  for  the  expansion  on  the  Pampas.  

To begin, the paper explains why the terms of trade were depressed in thelate colonial period and why they improved following independence. Just howmuch Argentina’s terms of trade improved during the nineteenth century isdemonstrated using newly compiled series for the country’s export prices,combined with the export prices of its trade partners as a proxy for its importprices. How the long terms-­‐‑of-­‐‑trade boom triggered expansion on the Pampasis then outlined. By way of a conclusion, it is argued that – with the Halperínparadox resolved – future research should focus less on the Pampean zone andmore on the negative impacts of the boom on the country’s more densely popu-­‐‑

lated  Interior  regions.11

Opening  DoorsUnder the Spanish empire the River Plate’s terms of trade had been depressedby Spanish merchants’ monopoly of trade with the American colonies. The logicof this monopoly has often been misunderstood, as historians have assumedthat it was intended to promote the peninsula’s own development.12 In establ-­‐‑ishing the monopoly, however, the crown’s principal goal was to finance itsown war-­‐‑making, rather than to provide markets for Spanish industry. Much ofthe crown’s revenues came from taxing American exports and imports whenthey passed through Spain, while it also extracted a disproportionate amount ofits domestic tax from Cádiz, the region of Spain that benefited most from theIndies trade.13 The trade monopoly was thus intended to generate flows of

10. On this problem for the periphery’s terms of trade in general, see J.A. Francis, ‘The Peri-­‐‑phery’s Terms of Trade in the Nineteenth Century: A Methodological Problem Revisited’,Technical Paper 1, 2014, online at h^p://www.joefrancis.info/pdfs/Francis_TP_1.pdf(accessed  8  August  2014).

11. In this, it suggests the research agenda implied by J.G. Williamson, ‘Globalization and theGreat Divergence: Terms of Trade Booms, Volatility and the Poor Periphery, 1782-­‐‑1913’,European Review of Economic History, 12:3, 2008; and idem, Trade and Poverty: When the ThirdWorld Fell Behind, Cambridge, MA, 2011, ch. 3. It should be noted that while Williamson’snarrative is convincing, there are major problems with the empirical data he uses to supportit.  See  Francis,  ‘Periphery’s  Terms  of  Trade’.

12. Thus, one economic historian claims that the trade monopoly was intended to ‘build a richand solid economy’ in Spain. G. Márquez, ‘Commercial Monopolies and External Trade’, inV. Bulmer-­‐‑Thomas, J. Coatsworth, and R. Cortés Conde, eds., The Cambridge EconomicHistory of Latin America, I, The Colonial Era and the Short Nineteenth Century, Cambridge, 2005,p.  397.

13. See J.A. Barbier and H.S. Klein, ‘Revolutionary Wars and Public Finance: The Madrid Treas-­‐‑

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goods  and  bullion  through  Spain  that  could  be  taxed  by  the  crown.14

In the River Plate the colonial order was primarily concerned with ensur-­‐‑ing that the silver from Upper Peru’s mines flowed back to Spain. All goodslegally imported from Europe had to be shipped from Seville (or, later, Cádiz)to the Isthmus of Panama, carried across land to the Pacific, shipped to Callao,Lima’s Pacific port, then taken 4,000 kilometres overland in mule trains to theRiver Plate. Such a lengthy journey brought high trade costs, which inflated theprices of imports, thereby providing a considerable degree of protection for the‘proto-­‐‑industry’ of the Andean peasant societies. In the River Plate’s Li^oralregion, Buenos Aires developed as an entrepôt for a flourishing contrabandtrade, with imports of African slaves, European manufactures, and tropicalgoods  from  Brazil  illicitly  exchanged  for  silver  from  Upper  Peru.15

For the River Plate’s pastoral producers, depressed terms of trade were aside effect of the Spanish trade monopoly. The monopoly generated great pricedifferentials between Europe and the Americas due to the high trade costs thatit entailed. Even following some trade liberalisation in the late eighteenthcentury, competition among Spanish merchants in Buenos Aires remainedminimal, so their markups were high.16 Their shipping, moreover, was ineffi-­‐‑cient, and their goods were heavily taxed – in both Spain and Buenos Aires – bythe Spanish authorities.17 Consequently, export prices were depressed and

ury, 1784-­‐‑1807’, Journal of Economic History, 41:2, 1981, pp. 327-­‐‑30; C. Marichal, ‘Beneficios ycostes fiscales del colonialismo: Las remesas americanas a España, 1760-­‐‑1814’, Revista de His-­‐‑toria Económica, 15:3, 1997, p. 480; and J. Cuenca-­‐‑Esteban, ‘Was Spain a Viable Fiscal-­‐‑MilitaryState on the Eve of the French Wars?’, in S. Conway and R. Torres Sánchez, eds., The Spend-­‐‑ing of States: Military Expenditure During the Long Eighteenth Century: PaWerns, Organisation,

and  Consequences,  1650-­‐‑1815,  Saarbrücken,  2011.14. The failure to recognise the fiscal role of the trade monopoly has led to some bizarre inter-­‐‑

pretations of the political economy of the Spanish empire. Grafe and Irigoin, for example,have interpreted the fiscal transfers from treasuries in mining regions to the treasuries ofports as evidence that the Spanish empire ‘successfully aimed at making the colonies self-­‐‑sufficient, with intra-­‐‑colonial transfers covering the needs of regions that either could not orwould not raise sufficient revenue’. R. Grafe and M.A. Irigoin, ‘The Spanish Empire and ItsLegacy: Fiscal Redistribution and Political Conflict in Colonial and Post-­‐‑Colonial SpanishAmerica’, Journal of Global History, 1:2, 2006, p. 263. Chanelling silver to the ports was,however, merely intended to ensure that it flowed back to Spain in exchange for importedEuropean  goods.

15. On the geography of the late colonial River Plate, see T. Halperín Donghi, Politics, Economicsand Society in Argentina in the Revolutionary Period, Cambridge, 1975, pp. 6-­‐‑16; and E. Tan-­‐‑deter, ‘El eje Potosí-­‐‑Buenos Aires en el imperio español’, in M. Ganci and R. Romano, eds.,Governare il mondo: L’imperio spagnolo dal XV al XIX secolo, Palermo, 1991. On its internationaltrade, see Z. Moutoukias, ‘El crecimiento en una economía colonial de antiguo regimen:Reformismo y sector externo en el Río de la Plata’, Arquivos do Centro Cultural CalousteGulbenkian, 34, 1995; and idem, ‘Comercio y producción’, in Academia Nacional de Historia,ed.,  Nueva  historia  de  la  Nación  Argentina,  IV,  Buenos  Aires,  2000,  pp.  72-­‐‑81.

16. Socolow suggests that 70 percent was considered an ‘acceptable markup’. S.M. Socolow, TheMerchants  of  Buenos  Aires,  1778-­‐‑1810,  Cambridge,  1978,  p.  60.

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import prices inflated. Thus, in the first half of the 1790s ca^le hides sold inBuenos Aires for as li^le as 20 percent of their wholesale price in Cádiz.18

Ranchers accordingly tended to be impoverished, with most illiterate and manylacking basic goods, such as shoes and socks.19 Merchants and bureaucratsinstead  formed  the  dominant  class.20

The colonial order began to disintegrate following the British invasions of1806 and 1807. Even though the British forces were repelled from Buenos Aireson both occasions, the province’s ranchers soon heard of the greatly improvedterms of trade that the British merchants were offering in Montevideo, the cityacross the River Plate estuary that had been successfully occupied. The rancherstherefore lobbied the Spanish authorities to liberalise trade. Mariano Moreno, aprominent young lawyer, famously appealed to the Spanish viceroy on theranchers’ behalf.21 He noted that in Montevideo ‘[s]ales were made at advant-­‐‑ageous prices, goods were bought at minimal values, and the rural world worefabrics that it had never known before, having sold at high values hides that itsgrandparents had thrown away as useless’.22 The ranchers and their represent-­‐‑atives recognised, then, that across the River Plate the terms of trade hadimproved dramatically under the British, so they sought the end of the Spanishtrade  monopoly,  through  independence  if  necessary.23

The disintegration of the empire brought Spain’s trade monopoly to anend. Already in November 1809 the Spanish viceroy had been persuaded toallow two British merchants to disembark and sell their cargoes.24 Then, threedays after an independent government was declared in late May 1810, theremaining restrictions on trade with foreigners were removed.25 Subsequently,the number of merchants arriving rose: whereas 50 ships had docked annually

17. Many goods imported from Spain came from other parts of Europe, so they were taxedwhen they entered Spain, taxed again when they were reexported, then taxed again uponarrival in Buenos Aires. The River Plate’s exports would pay the same taxes, although in theopposite  order.  Newland  and  Ortíz,  ‘Economic  Consequences’,  pp.  276-­‐‑78.

18. Amaral,  Rise  of  Capitalism,  p.  234,  Table  11.1.19. C.A. Mayo, ‘Landed but not Powerful: The Colonial Estancieros of Buenos Aires

(1750-­‐‑1810)’, Hispanic American Historical Review, 71:4, 1991, pp. 769-­‐‑70; and idem, Estancia ysociedad  en  la  Pampa  1740-­‐‑1820,  Buenos  Aires,  1995,  pp.  60-­‐‑61.  

20. The formation of this ruling alliance is described in Z. Moutoukias, ‘Power, Corruption, andCommerce: The Making of the Local Administrative Structure in Seventeenth-­‐‑CenturyBuenos  Aires’,  Hispanic  American  Historical  Review,  68:4,  1988.

21. J.  Lynch,  The  Spanish  American  Revolutions,  1808-­‐‑1826,  2nd  ed.,  London,  1986,  pp.  49-­‐‑50.22. D.M. Moreno, Representación que el apoderado de los hacendados de las campañas del Río de la

Plata,  Buenos  Aires,  (1809)  1874,  p.  29,  my  translation.23. As Adelman has stressed, independence in itself was not necessarily the goal of revolution-­‐‑

aries such as Moreno. Rather, they sought trade liberalisation so that the country would beable to exploit its land resources. J. Adelman, Republic of Capital: Buenos Aires and the LegalTransformation  of  the  Atlantic  World,  Stanford,  1999,  ch.  3.

24. Lynch,  Spanish  American  Revolutions,  pp.  49-­‐‑50.25. H.S.  Ferns,  Britain  and  Argentina  in  the  Nineteenth  Century,  Oxford,  1960,  p.  65.

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at Buenos Aires in the mid-­‐‑1790s,26 there were over 250 foreign merchant vesselsentering by the early 1820s.27 Crucially, this dramatic increase in overseas tradebecame the new basis for state finance in Buenos Aires, as import taxes replacedfiscal transfers from Upper Peru as the main source of government revenues.This ensured that all post-­‐‑independence governments would be commi^ed topromoting  trade.28

Increased competition among merchants turned Buenos Aires into more ofa sellers’ market for pastoral producers and a buyer’s market for consumers ofimported goods. Furthermore, export duties were lowered considerably,29

British and other foreign shipping was more efficient than Spanish vessels, andmerchants were no longer obliged to ship their goods via Spain. As trade costsfell, there was rapid price convergence: in the first half of the 1790s hides hadsold in Buenos Aires for around 20 percent of their ‘in bond’ price in Britain, butthey were selling for 80-­‐‑90 percent by the 1820s.30 Prices are not available forimports, but it is likely that a similar convergence took place. Hence, in theearly 1820s, a resident British merchant complained that he had ‘bought Englishstockings cheaper than I could buy them in London’, and that it was ‘cheaper topurchase  a  stock  of  linen  [in  Buenos  Aires]  than  at  home’.31  

26. Moutoukias,  ‘Crecimiento  en  una  economía’,  p.  803,  Cuadro  2.27. M. Llorca-­‐‑Jaña, The British Textile Trade in South America in the Nineteenth Century, Cam-­‐‑

bridge,  2012,  p.  341.28. Halperín  Donghi,  ‘Buenos  Aires  Landed  Class’,  pp.  44-­‐‑45.29. Within two weeks of independence, export taxes would be lowered (Buenos Ayres, Gazeta,

1, 1810, p. 6), and they would then be further eroded by inflation, falling to just four percenton dry ox hides by the end of the 1820s. Calculated from J. Broide, ‘La evolución de losprecios pecuarios argentinos en el periodo 1830-­‐‑1850’, mimeo, 1951, p. 41, Cuadro 16; alsopublished in Revista de la Facultad de Ciencias Económicas, 4:32; and M.A. Irigoin, ‘Finance,Politics and Economics in Buenos Aires, 1820s-­‐‑1860s: The Political Economy of CurrencyStabilisation’, PhD diss., University of London, 2000, p. 126, Table II.1.6. Export taxes wereeroded by inflation because, from 1822 onward, they were in fixed paper money amountsthat  were  only  sporadically  adjusted  for  rising  prices.  See  ibid.,  pp.  129-­‐‑30.  

30. In bond prices are those prior to the payment of any applicable import taxes. For hide pricesin Buenos Aires, see Anon., ‘Report on the Trade of the River Plate’, reproduced in R.A.Humphreys, British Consular Reports on the Trade and Politics of Latin America 1824-­‐‑26,London, (1824) 1940, p. 33; Anon., ‘Precios corrientes de productos en Buenos Aires en losaños 1821, 1822 y 1823’, in E.M. Barba, ed., Informes sobre el comercio exterior de Buenos Airesdurante el gobierno de Martín Rodríguez, Buenos Aires, (1824) 1978, p. 60; Broide, ‘Evoluciónde los precios’, pp. 41, Cuadro 16; and Moutoukias, ‘Crecimiento en una economía’, p. 804,Cuadro 3. For Buenos Aires hide prices in London, see A.D. Gayer, W.W. Rostow, and A.J.Schwary, microfilmed supplement to The Growth and Fluctuation of the British Economy1790-­‐‑1850, I and II, Oxford, 1953; as compiled by D.S. Jacks, K.H. O’Rourke, and J.G. Willi-­‐‑amson, ‘Commodity Price Volatility and World Market Integration since 1700’, Review ofEconomics and Statistics, 93:3, 2011, pp. 800-­‐‑13; with the database available online at h^p://www.sfu.ca/~djacks/data/publications/Britain,%20Commodity%20Prices,%201790-­‐‑1850,%20monthly.xlsx (accessed 3 May 2013); and Halperín Donghi, ‘Expansión ganadera’, p. 65. Thedifferential  varies  according  to  which  series  of  hide  prices  in  Britain  is  used.

31. An Englishman, A Five Years Residence in Buenos Ayres During the Years 1820 to 1825, 2nd ed.,

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Argentina’s terms of trade had been depressed, then, by the colonialorder, but they appear to have improved dramatically following independence.Initially this was due to the abolition of the Spanish trade monopoly, as hasbeen outlined here, but subsequently it was thanks to the industrial and trans-­‐‑port revolutions. In the North Atlantic core mechanisation combined with thecompetitive organisation of industry to lower the prices of the manufacturedgoods that Argentina imported, while more efficient shipping, be^er packaging,and faster flows of information radically reduced trade costs, which raisedexport  prices  and  lowered  import  prices  across  the  periphery.32

Measuring  the  BoomUp to now, historians have not realised the magnitude of Argentina’s nine-­‐‑teenth-­‐‑century terms-­‐‑of-­‐‑trade boom due to two methodological errors. Firstly,they have often not looked at Argentina’s terms of trade at all, preferringinstead to simply examine the nominal prices of its exports.33 Secondly, giventhe work entailed in piecing together Argentina’s fragmentary price record,even those who have looked at the terms of trade have relied upon prices fromcore countries as proxies for prices in Argentina itself.34 While commonly usedby historians of peripheral countries, such ‘proxy’ estimates of the terms oftrade are liable to have a major downward bias in the trend for the nineteenthcentury due to the considerable price convergence that took place between theNorth Atlantic core and the periphery.35 For Argentina, proxy estimates haveimplied an improvement in the terms of trade of around 150 percent from 1810to 1913.36 Nonetheless, a careful reconstruction of the existing price record sug-­‐‑gests  that  this  is  a  major  underestimate.

Figure 1 provides an initial illustration of Argentina’s terms-­‐‑of-­‐‑tradeboom. It shows the domestic wholesale prices of nine of the country’s main

London,  1827,  p.  93.32. Evidence of these processes in the River Plate can be found in D.C.M. Pla^, Latin America

and British Trade 1806-­‐‑1914, London, 1972, p. 14; J.E. Oribe Stemmer, ‘Freight Rates in theTrade between Europe and South America, 1840-­‐‑1914’, Journal of Latin American Studies, 21:1,1989; Y. Kaukiainen, ‘Shrinking the World: Improvements in the Speed of InformationTransmission, c. 1820–1870’, European Review of Economic History, 5:1, 2001, pp. 5, 20, Tables 1and  4;  and  Llorca-­‐‑Jaña,  British  Textile  Trade,  ch.  7.

33. Most notably, Halperín Donghi, ‘Expansión ganadera’, pp. 62-­‐‑66; but also H. Sabato,Agrarian Capitalism and the World Market: Buenos Aires in the Pastoral Age, 1840-­‐‑1890,Albuquerque, 1990, pp. 204-­‐‑08; Amaral, Rise of Capitalism, pp. 232-­‐‑41; and J.C. Garavaglia,‘La economía rural de la campaña de Buenos Aires vista a través de sus precios: 1756-­‐‑1852’,in R. Fradkin and J.C. Garavaglia, eds., En busca de un tiempo perdido: La economía de BuenosAires  en  el  país  de  la  abundancia,  1750-­‐‑1865,  Buenos  Aires,  2004.

34. See Newland, ‘Exports and Terms of Trade’; and Llorca-­‐‑Jaña, British Textile Trade, p. 195,Figure  7.4.

35. Francis,  ‘Periphery’s  Terms  of  Trade’.36. O.J. Ferreres, Dos siglos de economía argentina, 1810-­‐‑2004: Historia argentina en cifras, Buenos

Aires,  2005,  Table  8.1.7.

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Figure  1

Part-­‐‑Proxy  Terms  of  Trade  for  Nine  Argentine  Exports,  1780-­‐‑1913

0

50

100

150

200

1780 1800 1820 1840 1860 1880 1900 1920

Hides, dried

(1780+)

1913 = 100

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1780 1800 1820 1840 1860 1880 1900 1920

Hides, salted

(1821+)

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1780 1800 1820 1840 1860 1880 1900 1920

Jerked beef

(1829+)

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1780 1800 1820 1840 1860 1880 1900 1920

Tallow

(1833+)

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1780 1800 1820 1840 1860 1880 1900 1920

Wool

(1833+)

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Figure  1  (cont.)

Part-­‐‑Proxy  Terms  of  Trade  for  Nine  Argentine  Exports,  1780-­‐‑1913

0

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1780 1800 1820 1840 1860 1880 1900 1920

Cattle*

(1864+)

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Wheat

(1878+)

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Maize

(1879+)

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1780 1800 1820 1840 1860 1880 1900 1920

Linseed

(1887+)

*  Also  used  as  a  proxy  for  chilled  and  frozen  beef  in  the  export  price  index.

Note: The wholesale price of each good in Buenos Aires was divided by a chained,geometric Laspeyres index of the export prices of Argentina’s major trade partners,then all series were referenced so that 1913 equalled 100. The trade partners includ-­‐‑ed in the proxy import price index are Britain (from 1780), the United States (from1790), France (from 1809), Brazil (from 1821), Italy (from 1862), and Germany (from1880).

Sources:  See  the  Appendix.

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-

Figure  2

Part-­‐‑Proxy  Terms  of  Trade  for  Argentina,  1780-­‐‑1913

0

20

40

60

80

100

120

1780 1800 1820 1840 1860 1880 1900 1920

1913 = 100

Note: The series is a chained, geometric Laspeyres index, calculated from the nineseries in Figure 1, together with series for sheep skins (1864+), flour (1880+), goatskins  (1893+),  and  numerous  other  minor  exports  from  1910  onward.

Sources:  See  the  Appendix.

exports relative to a crude proxy import price index constructed from theexport prices of six of Argentina’s major trade partners. These therefore repres-­‐‑ent ‘part-­‐‑proxy’ terms of trade, in that they use Argentina’s own prices for itsexports but depend upon prices from Argentina’s trade partners as proxies forits import prices. As such, they are still likely to have a downward bias in thetrend due to the price convergence that took place during the nineteenthcentury.37 Nonetheless, they suggest a far greater terms-­‐‑of-­‐‑trade boom than isnormally  supposed.

When all the price series are indexed to make a single series of Argentina’sterms of trade, as in Figure 2, they show an improvement of around 1,500percent from the 1780s to the 1900s. What is more, even this is likely to be anunderestimate because the crude proxy import price index does not take intoaccount the price convergence that took place on the import side. If adjustmentsare made for the effects of falling trade costs on import prices, it seems likelythat the improvement would be more than 2,000 percent over the same period.Assuming, for instance, that the differential of import prices in Argentina toexport prices in the core fell from 100 percent in the 1780s to 20 percent in the

37. On this problem in such ‘part-­‐‑proxy’ estimates of peripheral countries’ terms of trade, seeFrancis,  ‘Periphery’s  Terms  of  Trade’,  pp.  13-­‐‑15.

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Figure  3

Volatility  in  Argentina’s  Part-­‐‑Proxy  Terms  of  Trade,  1780-­‐‑1913

-60

-40

-20

0

20

40

60

1780 1800 1820 1840 1860 1880 1900 1920

(a) Annual % change

-60

-40

-20

0

20

40

60

1780 1800 1820 1840 1860 1880 1900 1920

(b) % variation from trend

* The cyclical component as a percentage of the trend component. Both were calcu-­‐‑lated  using  a  Hodrick-­‐‑Presco^  Filter,  with  the  smoothing  parameter  set  at  1,000.

Sources:  Calculated  from  the  series  in  Figure  2.

1900s, which is plausible, the terms of trade would have improved by 2,500percent.38 Furthermore, the terms of trade also appear to have become increas-­‐‑ingly stable, as indicated by the two measures of volatility shown in Figure 3.Panel (a) simply shows the annual percentage change in the series, while Panel(b) shows the cyclical component in the series as a percentage of its trend com-­‐‑ponent. Both suggest decreasing volatility.39 The terms of trade thus appear tohave improved persistently for over a century, while they also become lessvolatile.  Here  were  the  price  incentives  for  the  expansion  on  the  Pampas.

Expansion  on  the  PampasThe Robertson brothers, two prominent Sco^ish merchants, provided a vividaccount of how improved terms of trade triggered growth in Corrientes, aprovince in Argentina’s Li^oral region, in the 1810s.40 When the Robertsons

38. See  the  Appendix.39. Some caution should be exercised in interpreting the strong volatility during the 1810s

because the source for the export price index for this period is based on hide prices that aregiven as several-­‐‑year averages. Nonetheless, even if the 1810s are excluded from the picture,the  impression  of  declining  volatility  remains.

40. J.P. Robertson and W.P. Robertson, LeWers on South America: Comprising Travels on the Banksof the Paraná and Rio de la Plata, I, London, 1843, pp. 174-­‐‑86. On the Robertsons, see HalperínDonghi, Politics, Economics, pp. 87-­‐‑88; V.B. Reber, British Mercantile Houses in Buenos Aires,

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arrived, they found that the province’s ranchers ‘paid high prices for theirgoods, and got low ones for their produce’41 – their terms of trade were, in otherwords, depressed. According to their own account, the Robertsons transformedthat situation by reversing ‘the plan of the Old Spaniards: we gave high pricesfor  hides,  and  took  low  ones  for  goods’.42  They  described  the  result  as  follows:

[T]he country, as if by magic, started into industrious life and mercantile activity,in every section of its wide extent. Herds and flocks were gathered together, –thousands and tens of thousands of the wild ca^le were slaughtered for theirhides; and in all directions the creaking of the large wheels of huge and ponderouswagons, laden with the produce of the estancias and villages, as they uninterrup-­‐‑tedly traversed the country, gave token of renewed prosperity and peace, where afew  months,  nay  a  few  weeks,  before,  all  had  been  rapine,  desolation,  and  decay.43

Such optimism reflected the experience of the Li^oral provinces, which wereable to take advantage of the terms-­‐‑of-­‐‑trade boom due to the navigable riversthat connected them to the oceans, allowing them to export their pastoralproducts.

Buenos Aires, in particular, benefi^ed from improved terms of trade. Notonly were there roughly 400,000 square kilometres of Pampas grasslands to itssouth and west,44 but the city’s strategic location on the River Plate estuary alsoallowed it to monopolise the customshouse revenues that came from taxingoverseas trade.45 To increase its revenues, the Buenos Aires governmentencouraged the expansion of ranching. Land grants were made soon after inde-­‐‑pendence to encourage ranchers to push Buenos Aires’ frontiers into Indian ter-­‐‑ritory,46 and in the 1820s large tracts of Pampean land, which was mostly pub-­‐‑licly owned, became available on 20-­‐‑year, transferable leaseholds, most ofwhich would later be converted to freehold titles in the 1830s.47 Merchants

1810-­‐‑1880, Cambridge, MA, 1979, pp. 112-­‐‑13; and R.D. Salvatore, ‘The Breakdown of SocialDiscipline in the Banda Oriental and the Li^oral, 1790-­‐‑1820’, in M.D. Szuchman and J.C.Brown, eds., Revolution and Restoration: The Rearrangement of Power in Argentina 1860,Lincoln,  NE,  1994,  pp.  90-­‐‑95.

41. Robertson  and  Robertson,  LeWers  on  South  America,  pp.  174-­‐‑7542. Ibid.,  pp.  176-­‐‑7743. Ibid.,  p.  179.44. Estimated from R. Cortés Conde, El progreso argentino: 1880-­‐‑1914, Buenos Aires, 1979, p. 56,

Cuadro  2.1.45. T. Halperín Donghi, Guerra y finanzas en los origenes del Estado argentino (1791-­‐‑1850), Buenos

Aires,  (1982)  2005,  pp.  175-­‐‑77.46. M.A. Cárcano, Evolución histórica del régimen de la tierra pública 1810-­‐‑1916, 3rd ed., Buenos

Aires, 1972, ch. 3; and M.E. Infesta, ‘Aportes para el estudio del poblamiento de la fronteradel Salado’, in Archivo Histórico de la Provincia de Buenos Aires, ed., Estudios sobre la Pro-­‐‑vincia  de  Buenos  Aires,  La  Plata,  1991.

47. M.E. Infesta, ‘La enfiteusis en Buenos Aires, 1820-­‐‑1850’, in S. Amaral and M. Valencia, eds.,Argentina: El país puevo: Problemas de historia económica, 1800-­‐‑1914, La Plata, 1999; and idem,La pampa criolla: Usufructo y apropiación privada de tierras públicas en Buenos Aires, 1820-­‐‑1850,

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diversified into landownership in response to the shift in relative prices. Gradu-­‐‑ally, a new landowning class emerged, becoming the principal beneficiacy ofthe dramatic export expansion that began in the 1840s.48 Ca^le hides initiallyaccounted for most of the growth, although jerked beef, other skins and hides,tallow, and increasingly wool also became important exports. Initially, thesepastoral goods mainly went to Britain, but continental Europe and the UnitedStates  subsequently  became  the  major  importers.49

The arrival of the railways in the second half of the nineteenth centuryturned the pastoral expansion into an arable expansion that encompassed thewhole of the Pampas. The customshouse revenues were used to subsidiseforeign railway companies and to build publicly-­‐‑owned lines,50 resulting in anew railway network that facilitated the final defeat of the Pampas Indians.51

Around 500,000 km2 of Pampean land would then be incorporated into Argen-­‐‑tina from the mid-­‐‑1850s to the end of the 1880s. Buenos Aires Province itselfincreased from 89,000 km2 in 1855 to 311,000 km2 in 1890, while La Pampa wascreated as a new ‘national territory’ to incorporate 145,000 km2 of the conqueredland in the centre of the country.52 Reduced costs of overland transportationthen allowed the land away from the rivers to be profitably cultivated for thefirst time. Figure 4 illustrates how a dramatic expansion in arable exports fol-­‐‑lowed the arrival of the railways, as Argentina became one of the world’s majorexporters of agricultural products. Improved terms of trade had in this wayinspired  a  century-­‐‑long  expansion  on  the  Pampas.

Progress  and  DeclineThis paper has resolved the Halperín paradox. It has argued that much of thehistoriography of Argentina’s long nineteenth century has been misled by

Mar  del  Plata,  2006.48. This transformation has been documented in R. Hora, ‘Landowning Bourgeoisie or Business

Bourgeoisie? On the Peculiarities of the Argentine Economic Elite, 1880-­‐‑1945’, Journal ofLatin American Studies, 34:3, 2002; and idem, ‘El perfil económico de la elite de Buenos Airesen  las  décadas  centrales  del  siglo  XIX’,  Revista  de  Historia  Económica,  24:2,  2006.

49. Amaral, Rise of Capitalism, ch. 12; and M.A. Rosal and R. Schmit, ‘Del reformismo colonialborbónico al libre comercio: Las exportaciones pecuarias del Río de la Plata (1768-­‐‑1854)’,Boletín del Instituto de Historia Argentina y Americana ‘Dr Emilio Ravignani’, 3:20, 1999, pp.90-­‐‑95.

50. C.M. Lewis, British Railways in Argentina 1857-­‐‑1914: A Case Study of Foreign Investment,London, 1983, pp. 10-­‐‑13; S.A. Palermo, ‘The Nation Building Mission: The State-­‐‑OwnedRailways in Modern Argentina, 1870-­‐‑1930’, PhD diss., State University of New York, 2001,pp. 68-­‐‑70; and A.M. Regalsky, ‘Políticas públicas, capital extranjero y estructura demercado: El desarrollo de los ferrocarriles en la Argentina antes de 1914’, Revista de Institu-­‐‑ciones,  Ideas  y  Mercados,  46,  2007,  pp.  178-­‐‑79.

51. C.M. Lewis, ‘La consolidación de la frontera argentina a fines de la década del 70: Losindios, Roca y los ferrocarriles’, in G. Ferrari and E. Gallo, eds., La Argentina del ochenta alcentenario,  Buenos  Aires,  1980.

52. Estimated  from  Cortés  Conde,  Progreso  argentino,  p.  56,  Table  2.1.

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Figure  4

Argentina’s  Arable  Expansion,  1875-­‐‑1913

1

10

100

1000

10000

100000

1000000

10000000

1

10

100

1000

10000

100000

1860 1870 1880 1890 1900 1910 1920

Maize

Wheat

Linseed

Arable exports

tons (right)

Railways

km (left)

Source: E. Tornquist, The Economic Development of the Argentine Republic in the LastFifty  Years,  Buenos  Aires,  1919,  pp.  30-­‐‑31,  116-­‐‑17.

Halperín Donghi’s methodological error of looking at the nominal prices ofArgentina’s exports in foreign markets as a proxy for prices in Argentina itself.Following Halperín Donghi, historians have a^empted to explain why therewas an expansion on the Pampas despite the lack of price incentives. By apply-­‐‑ing a be^er methodology, however, this paper has demonstrated that therewere in fact clear price incentives for the expansion. Indeed, over the whole ofthe long nineteenth century – from the 1780s through to the 1900s – Argentina’sterms of trade probably improved by at least 2,000 percent. There were, then,massive  price  incentives  for  increasing  output.

The progress that resulted from Argentina’s expansion has been much cel-­‐‑ebrated by some historians.53 It could be seen most clearly in the growth of ter-­‐‑ritory, population, and trade.54 The federal government enlarged the territory

53. Especially in Cortés Conde, Progreso argentino; idem, ‘The Export Economy of Argentina1880-­‐‑1920’, in idem and S.J. Hunt, eds., The Latin American Economies: Growth and the ExportSector 1880-­‐‑1930, New York, 1985; R. Cortés Conde, ‘The Growth of the Argentine Economy,c. 1870-­‐‑1914’, in L. Bethall, ed., The Cambridge History of Latin America, V, c. 1870-­‐‑1930, Cam-­‐‑bridge, 1986; R. Cortés Conde, La economía argentina en el largo plazo: Ensayos de historia econ-­‐‑ómica de los siglos XIX y XX, Buenos Aires, 1997; and idem, ‘The Vicissitudes of an ExportingEconomy: Argentina (1975-­‐‑1930)’, in E. Cárdenas, J.A. Ocampo, and R. Thorp, eds., An Econ-­‐‑omic  History  of  Twentieth-­‐‑Century  Latin  America,  I,  The  Export  Age,  Oxford,  2000.

54. Economic historians also point toward dramatic per capita GDP growth but their numbersare far from reliable. See J.A. Francis, ‘The Terms of Trade and the Rise of Argentina in the

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under its control from around 1.9 million square kilometres at the end of the1860s to 2.8 million by the eve of the First World War,55 while the land undercultivation increased from roughly 600,000 hectares at the beginning of the1870s to 24 million in 1913.56 Immigrants provided much of the labour for thisexpansion, with about three million foreigners, mainly Italians and Spanish,se^ling from the 1860s through to the First World War, leading to a populationgrowth of 3.3 percent per year57 – faster than any other major country.58 Exportvolume  grew  by  approximately  five  percent  annually.59

Yet improved terms of trade were not entirely beneficial. Inequality tendedto increase not only between landowners and the landless,60 but also betweenregions that were relatively land abundant and land scarce. While the Pampeanzone prospered, much of the Interior, where approximately two thirds of thepopulation lived at independence,61 was less fortunate. Prior to colonisation inthe sixteenth century, the mountainous North and West had been populated bysedentary peasants, living on the southern periphery of the Incan empire.Spanish se^lers had rapidly established themselves as overlords of thesepeasant societies, using Indian labour to supply Potosí, the great mining city inUpper Peru, with mules, sugar, wine, tobacco, and other goods. Crucially, theywere protected from competition with imports by the high trade costs that res-­‐‑ulted  from  the  Spanish  monopoly.62

After independence, the Interior’s products struggled to compete with thecheaper imports arriving at the Li^oral’s expanding market because the highcosts of overland transportation made them uncompetitive. In 1825, forexample, it was estimated that at a distance of 1,040 km the cost of transporting

Long Nineteenth Century’, PhD diss., London School of Economics and Political Science,2013,  Appendix  1.1,  esp.  pp.  45-­‐‑53.

55. Estimated from Superintendente del Censo, Primer censo de la República Argentina, BuenosAires, 1872, p. 672; and Comisión Nacional de Censo, Tercer censo nacional, III, Población,Buenos Aires, 1916, p. 58. It can be assumed that the indigenous-­‐‑occupied ‘national territor-­‐‑ies’  were  not  under  the  federal  government’s  control  when  the  1869  census  was  taken.

56. Tornquist,  Economic  Development,  p.  26.57. Z. Recchini de La^es and A.E. La^es, eds., La población de Argentina, Buenos Aires, 1975, pp.

199-­‐‑200.58. See  the  estimates  in  A.  Maddison,  The  World  Economy,  II,  Historical  Statistics,  Paris,  2006.59. H. Diéguez, ‘Crecimiento e inestablidad del valor y el volumen físico de las exportaciones

argentinas  en  el  periodo,  1864-­‐‑1963’,  Desarrollo  Económico,  12:46,  1972,  p.  349,  Cuadro  18.60. See L.L. Johnson, ‘Distribution of Wealth in Nineteenth-­‐‑Century Buenos Aires Province: The

Issue of Social Justice in a Changing Economy’, in K.J. Andrien and L.L. Johnson, eds., ThePolitical Economy of Spanish America in the Age of Revolution, 1750-­‐‑1850, Albuquerque, 1994;and R. Hora, ‘La evolución de la desigualdad en la Argentina del siglo XIX: Una agenda enconstrucción’,  Desarrollo  Económico,  47:187,  2007.

61. This is an approximation and does not include the indigenous populations beyond the fron-­‐‑tiers. From J. Comadrán Ruiz, Evolución demográfica argentina durante el período hispano:1535-­‐‑1810,  Buenos  Aires,  1969,  p.  115.

62. P. Santos Martínez, Las industrias durante el Virreinato (1776-­‐‑1810), Buenos Aires, 1969; andHalperín  Donghi,  Politics,  Economics,  pp.  6-­‐‑16.

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wine overland to Buenos Aires equalled half the price of wine in that city.63 Fordistant wine-­‐‑producing provinces such as Mendoza or San Juan, both around1,000 km away from Buenos Aires, such high transportation costs meant thattheir wines struggled to compete with imports in the Li^oral’s market. The lossof these markets then reduced profit margins, so vineyards were converted toalfalfa, in order to feed the ca^le that were being herded from the Pampas toChile.64

Worse still, the Interior’s textile producers were vulnerable to importedcloths, which could be profitably transported over land due to their lightweight. In the late colonial era, textile production was widespread amongpeasant women, both for their own consumption and for sale in urbanmarkets.65  Hence,  in  1788  the  governor  of  Córdoba  reported  that:

Córdoba’s sheep are the principal respite of the poor people or those of middlingmeans because their wool is of a predictable quality, they employ it in blankets,cloths, ponchos, throws, and rugs, with which they do a considerable trade toBuenos Aires, Mendoza, Chile, Salta, and even Peru, and almost all the women ofthe countryside dedicate themselves to these goods, which they generally ex-­‐‑change with merchants for Castilian goods, such as linens, co^ons, velvets, silks,etc. From sheep and goats skins they make very good rugs and cured leathers thathave  their  own  circulation.66

Following independence, the Interior’s textiles were first pushed out of the Li^-­‐‑oral’s market by cheaper imports; then their place in the Interior’s own marketswas gradually diminished as North Atlantic manufacturers began to adapt theirproducts to Argentine tastes. Only the still considerable costs of overland trans-­‐‑portation appear to have allowed the textile producers to continue, although it

63. M. Burgin, The Economic Aspects of Argentine Federalism 1820-­‐‑1852, Cambridge, MA, 1946, p.118, Table 17. Conversion factor from leagues to kilometres from Tornquist, Economic Devel-­‐‑opment,  p.  326.

64. B. Bragoni, ‘Condiciones y estímulos en la recuperación de una economía regional: Prácticasmercantiles e instituciones empresarias en Mendoza, 1820-­‐‑1880’, in M.A. Irigoin and R.Schmit, eds., La desintegración de la economía colonial: Comercio y moneda en el interior del espaciocolonial (1800-­‐‑1860), Buenos Aires, 2003, pp. 278-­‐‑79. This analysis has been disputed byAmaral, who argues that it was actually the civil wars that destroyed the West’s wineindustry after independence, rather than competition with foreign imports, and that it thentook decades for grape production to recover ‘because of its slower rhythms’. S. Amaral,‘Free Trade and Regional Economies: San Juan and Mendoza, 1780-­‐‑1820’, in Szuchman andBrown, eds., Revolution and Restoration, p. 144. This argument is strange, however, because itshould  not  take  decades  to  reestablish  vineyards  if  the  incentives  are  there.

65. Santos Martínez, Industrias durante el Virreinato, pp. 44-­‐‑48; and C.S. Assadourian, El sistemade la economía colonial: Mercado interno, regiones y espacio económico, Lima, 1982, pp. 253-­‐‑54.For a detailed case study, see E. Hermi^e and H.S. Klein, ‘Crecimiento y estructura de unacomunidad provinciana de tejedores de ponchos: Belén, 1678-­‐‑1869’, Documento de Trabajo78,  Centro  de  Investigaciones  Sociales,  Instituto  Torcuato  Di  Tella,  1972.

66. Marques de Sobre Monte, ‘Sobre la Intendencia de Córdoba del Tucumán (1788)’, Revista deBuenos  Aires,  2:6,  1865,  p.  483,  my  translation.

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was  in  a  considerably  impoverished  state.67

Textile producers all but disappeared completely when the railwaysbrought the terms-­‐‑of-­‐‑trade boom to the Interior from the 1870s and ‘80s. In 1869the first national census had found 94,882 textile producers,68 but their numbersfell to just 39,725 in 1895.69 To put these numbers in perspective, in 1869 textileproducers represented 19 percent of the Interior’s workforce, whereas in 1895they had fallen to 6 percent. The authors of the 1895 census report were unequi-­‐‑vocal  as  to  why  this  had  occurred:

Until 1869, having no railways in the interior, and with high [internal] transporta-­‐‑tion costs, a great proportion of the population consumed [domestic textiles],which could rival the prices of similar goods from abroad: today, the competitiondue to the relatively low freight rates has made the consumption of domesticproducts fall, and therefore made redundant many of those who used to engage inthis  profession.70

By the 1914 census the number of textile workers recorded had fallen further to30,980 people; in the Interior, they made up just 3 percent of the workforce.71 Asin other parts of the periphery,72 this major ‘proto-­‐‑industry’ had been under-­‐‑

67. Assadourian, Sistema de la economía, pp. 253-­‐‑65; S. Romano, Economía, sociedad y poder enCórdoba: Primera mitad del siglo XIX, Córdoba, 2002, pp. 123-­‐‑26, 162-­‐‑65; and C.S. Assadourianand S. Palomeque, ‘Las relaciones mercantiles de Córdoba (1800-­‐‑1830): Desarticulación ydesmonetización del mercado interno colonial en el nacimiento del espacio económiconacional’, in Irigoin and Schmit, eds., Desintegración de la economía, pp. 177-­‐‑79, 182-­‐‑84; alsosee M. Llorca-­‐‑Jaña, ‘Knowing the Shape of Demand: Britain'ʹs Exports of Ponchos to theSouthern Cone, c. 1810s–70s’, Business History, 51:4, 2009; and idem, British Textile Trade, pp.263-­‐‑67.

68. Including the census cateogories ‘blanqueadores’, ‘cordeleros, hiladores é hiladoras’,‘tejedores y tejedoras’, ‘pelloneros’, ‘tintoreros’, and ‘torcedores de lana, seda, etc’. Calcu-­‐‑lated from Superintendente del Censo, Primer censo, pp. 642-­‐‑669. This number is somewhatinflated because the 1869 census included child workers, whereas later censuses onlyincluded those aged 14 and over. A computer-­‐‑coded sample of 100,944 individual returnsfrom the 1869 census suggests that only 6 percent of textile workers were below 14 yearsold. Calculated from R. McCaa, M.R. Haines, and E.M. Mulhare, ‘Argentina: The FirstNational Historical Census Microdata’, in P.K. Hall, R. McCaa, and G. Thorvaldsen, eds.,Handbook of International Historical Microdata for Population Research, Minneapolis, 2000;underlying data available online at h^p://www.hist.umn.edu/~rmccaa/data/argentine_censuses_19thc.zip (accessed 1 September 2013). Applying that figure to the 1869 census datawould  suggest  that  there  were  89,189  textile  workers  in  that  year.

69. Including the census categories ‘cordeleros, cabulleros, etc’, ‘tejedores’, and ‘tintoreros’. Cal-­‐‑culated from Comisión Directiva, Segundo censo de la República Argentina, II, Población,Buenos Aires, 1898, pp. 47-­‐‑50, 139-­‐‑142, 183-­‐‑186, 216-­‐‑219, 257-­‐‑60, 297-­‐‑300, 326-­‐‑29, 365-­‐‑68,402-­‐‑05,  439-­‐‑42,  476-­‐‑79,  515-­‐‑16,  552-­‐‑55,  592-­‐‑95,  624-­‐‑27,  706-­‐‑09.

70. Ibid.,  p.  cxliv,  my  translation.71. Including the census categories ‘cardadores de lana; cordeleros; fabricantes de tejidos; hil-­‐‑

adores, tejedores, tellaristas; tintoreros’. Calculated from Comisión Nacional de Censo,Tercer  censo,  IV,  Población,  Buenos  Aires,  1916,  pp.  201-­‐‑329.

72. Williamson, Trade and Poverty, esp. chs. 3-­‐‑5. Again, for major caveats about Williamson’s

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mined  by  improved  terms  of  trade.Unfortunately, research into these processes of decline has been inhibited

by the Halperín paradox. Historians have focused on trying to explain why theexpansion occurred on the Pampas despite the lack of price incentives, so theInterior has been largely overlooked. Nevertheless, as this paper has shown,once the terms of trade are measured correctly, considerable price incentives forthe expansion on the Pampas can be seen. The Halperín paradox has in this waybeen resolved. What now needs to be further investigated is how the terms-­‐‑of-­‐‑trade boom impacted on the ‘other Argentina’.73 In other words, future researchmust look beyond Buenos Aires to the Interior, in order to explain not onlyArgentina’s  progress  in  the  long  nineteenth  century,  but  also  its  decline.

Appendix:  Argentina’s  Terms  of  Trade,  1780-­‐‑1913This appendix briefly describes how the new ‘part-­‐‑proxy’ estimate of Argen-­‐‑tina’s ‘net barter terms of trade’ (NBTT) was calculated.74 To begin with, someof the terminology will be clarified, then the sources and methods used for thenew  estimate  will  be  discussed.

Ideally, a country’s terms of trade should be calculated using its ownprices for both the export price index (Px) and the import price index (Pm). Thiscan  be  done  using  wholesale  prices  from  within  the  country,  as  follows:

Wholesale(NBTT(=(Domestic(wholesale(Px

Domestic(wholesale(Pm

Alternatively, at-­‐‑the-­‐‑port prices can be used, which include wholesale markupsand excise duties for export prices, but exclude customs taxes and wholesalemarkups for imports. Technically, these are known as ‘cost, insurance, andfreight’ (CIF) import prices and ‘free on board’ (FOB) export prices. The at-­‐‑the-­‐‑port  terms  of  trade  are  calculated  in  this  way:

At#the#port)NBTT)=)FOB)Px

CIF)Pm

Regre^ably, such historical price data are often unavailable, particularlyfor poorer, more peripheral countries. As a result, historians have often usedprices from Britain and the United States as proxies for prices in the peripheral

data,  see  Francis,  ‘Periphery’s  Terms  of  Trade’.73. The phrase comes from L. Sawers, The Other Argentina: The Interior and National Development,

Oxford,  1996.74. The accompanying workbook is available online at h^p://www.joefrancis.info/data/Francis_

Arg_tots.xlsx. For a longer account of its contents, see Francis, ‘Terms of Trade’, Appendix4.1.

  ’  

- 18 -

countries  themselves.75  The  results  can  be  considered  ‘proxy  terms  of  trade’:

Proxy&NBTT&=&Foreign&Px

Foreign&Pm

Proxy terms-­‐‑of-­‐‑trade estimates are, then, those in which another country’sprices  are  used  in  place  of  a  country’s  own  prices.

For the nineteenth century, such proxy estimates are problematic becauseof the price convergence that took place between core and peripheral countries.This meant, for example, that for much of the nineteenth century the price ofIndonesian sugar fell in London, even as it rose in Java. Consequently, proxyterms of trade for Indonesia calculated using London prices have a significantdownward bias in their trend. In the case of Indonesia, this can be demon-­‐‑strated thanks to the scrupulous work of Dutch researchers in reconstructingthe country’s price history.76 For no other peripheral country, however, hasequivalent research been done,77 so historians have routinely relied upon proxyestimates. The terms-­‐‑of-­‐‑trade series presented for most other peripheral coun-­‐‑tries during the nineteenth century must consequently be treated with consider-­‐‑able  scepticism,  including  those  for  Argentina.78

75. See  Francis,  ‘Periphery’s  Terms  of  Trade’,  Appendix.76. W.L. Korthals Altes, Changing Economy in Indonesia: A Selection of Statistical Source Material

from the Early 19th Century up to 1940, XV, Prices (Non-­‐‑Rice) 1814–1940, Amsterdam, 1994. Foranalysis  of  this  data,  see  Francis,  ‘Periphery’s  Terms  of  Trade’,  pp.  10-­‐‑17.

77. Although the situation is starting to improve. Most notably, see D. Chilosi and G. Federico,‘Asian Globalizations: Market Integration, Trade and Economic Growth, 1800-­‐‑1938’, Econ-­‐‑omic  History  Working  Paper  183,  London  School  of  Economics  and  Political  Science,  2013.

78. The standard series for Argentina for 1811-­‐‑70 comes from Newland, ‘Exports and Terms ofTrade’, pp. 413-­‐‑15; for the underlying data, see idem, ‘Puramente animal: Exportaciones ycrecimiento en Argentina 1810-­‐‑1870’, mimeo, 1990. Newland mainly used wholesale pricesand unit values from the core countries. There is no canonical series for 1870-­‐‑86, so the gapis filled by various means. Williamson, for example, relies on a series calculated usingBritish commodity prices for exports and US wholesale price indices for imports. J.G. Willi-­‐‑amson, ‘Globalization and the Great Divergence: Terms of Trade Booms, Volatility and thePoor Periphery, 1782-­‐‑1913’, European Review of Economic History, 12:3, 2008, p. 390; also seeC. Bla^man, J. Hwang, and J.G. Williamson, ‘Winners and Losers in the CommodityLo^ery: The Impact of Terms of Trade Growth and Volatility in the Periphery 1870-­‐‑1939’,Journal of Development Economics, 82:1, 2007. For 1886-­‐‑1913, an index originally calculated byFord is the standard series. He used a mixture of prices from Argentine trade statistics andBritish wholesale prices that he corrected for changes in transportation costs. A.G. Ford,‘Export Price Indices for the Argentine Republic, 1881-­‐‑1914’, Inter-­‐‑American Economic Affairs,9:2, 1955. This correction procedure means that Ford’s estimates should be considerablymore accurate than those of Newland or Williamson, although there are doubts aboutArgentina’s trade statistics for much of this period. See R. Cortés Conde, T. Halperin, and H.Gorostegui de Torres, ‘Evolución del comercio exterior argentino: Tomo I: Exportaciones:Parte primera 1864-­‐‑1930’, mimeo, 1965. Moreover, the version of Ford’s index that hasroutinely been used is that presented by G. di Tella and M. Zymelman, Etapas del desarrollo,

  ’  

- 19 -

The new terms-­‐‑of-­‐‑trade estimate for Argentina that is presented in Figure2 of this paper is far from perfect. It can be considered a ‘part-­‐‑proxy’ estimate,in that it uses Argentina’s own prices for exports but the prices of Argentina’smain  trade  partners  for  imports.  It  is  calculated  as:

Part%proxy*NBTT*=*Domestic*Px

Foreign*Pm

It should be stressed that the terms-­‐‑of-­‐‑trade estimate for nineteenth-­‐‑centuryArgentina that results from this formula is likely to have a downward bias inthe trend because it does not take into account the price convergence thatoccurred  on  the  import  side.

Calculating Argentina’s export price index was a complicated task. Thefollowing sources were found for the raw price data: unit values for hides fromZacharías Moutoukias’ compilation of late colonial trade statistics for 1779-­‐‑96;79

wholesale hide prices for 1810-­‐‑23 from a report presented by British merchantsto the new British consul in 1824.80 Julio Broide’s compilation of wholesaleprices for 1829-­‐‑51, as reported in the English-­‐‑language British Packet and Argen-­‐‑tine News;81 Juan Álvarez’ compilation of wholesale prices for the 1860sonwards, taken from the bulletin of the Buenos Aires Stock Exchange;82 RobertoCortés Conde, Tulio Halperín Donghi, and Haydée Gorostegui de Torres’sunpublished reconstruction of Argentina’s export statistics from the 1860s to theearly twentieth century, when market prices began to be used in the officialtrade statistics;83 and the official trade statistics from the early twentieth centuryonwards.84 The fragmentary price series compiled from these sources were thenconverted into British pound sterling,85 the era’s dominant currency, and metric

Las etapas del desarrollo económico argentino, Buenos Aires, 1973, p. 56, Table 10. Bizarrely,when a^empting to chain two of Ford’s export price indices, di Tella and Zymelman did notratio splice them; rather, they simply jumped from one series to another in 1892, resulting inan artificial increase. Unfortunately, other scholars have tended to use the di Tella andZymelman version rather than Ford’s original. For example, see Ferreres, Dos siglos, p. 658;and L. Arroyo Abad, ‘Persistent Inequality? Trade, Factor Endowments, and Inequality inRepublican  Latin  America’,  Economic  History  Review,  73:1,  2013,  p.  71.

79. Moutoukias,  ‘Crecimiento  en  una  economía’,  p.  804,  Cuadro  3.80. Anon.,  ‘Report  on  the  Trade’,  p.  33;  and  idem,  ‘Precios  corrientes’,  p.  60.81. Broide,  ‘Evolución  de  los  precios’,  pp.  41-­‐‑43,  50,  Cuadros  16-­‐‑18,  and  22.82. J.  Álvarez,  Temas  de  historia  económica  argentina,  Buenos  Aires,  1929,  pp.  208-­‐‑26.83. Cortés  Conde,  Halperin,  and  Gorostegui  de  Torres,  ‘Evolución  del  comercio’,  pp.  73-­‐‑79.84. As compiled in Dirección General de Estadística de la Nación (DGEN), Extracto estadístico de

la República Argentina correspondiente al año 1915, Buenos Aires, 1916, pp. 204-­‐‑17; A. Bunge,Intercambio económico de la República, 1910-­‐‑1917, Buenos Aires, 1919, ch. 11; and V. Vázquez-­‐‑Presedo, Estadísticas históricas argentinas (comparadas), II, Segunda parte 1914-­‐‑1939, BuenosAires,  1971,  pp.  194-­‐‑221.

85. For 1780-­‐‑1822, it was necessary to estimate the exchange rate based on the silver content ofthe peso and the price of silver in London. From Álvarez, Temas de historia, pp. 80-­‐‑124; as

  ’  

- 20 -

units.86

The various export price series were combined into a chained geometricLaspeyres index, which was used as a shorthand means to approximate achained Fisher index.87 Ten separate subperiods were calculated; then they werespliced together using the geometric mean of their overlapping periods.88 Theweights assigned to the 31 different goods in each subperiod can be seen inAppendix Table 1.89 They were assigned based on the values of goods exportedin the indicated years, according to Argentina’s trade statistics. As can be seen,the number of goods included in the index increases over time: from 1780 to1821 it includes dry hides only; in 1822 salted hides are added; in 1829 jerkedbeef; and so on. This reflects both the paucity of price data and the increasingvariety  of  goods  exported  from  Argentina.

The proxy import price index, by contrast, is considerably cruder. It is cal-­‐‑culated from export price indices for six of Argentina’s major trade partners:Brazil, Britain, France, Germany, Italy, and the United States. With the excep-­‐‑tion of Brazil,90 the export price indices were taken from the work of otherscholars,91 then converted to sterling.92 Again, they were combined into a

compiled by Rodolfo G. Frank, online at h^p://www.anav.org.ar/sites_personales/5/MONEDA.XLS (accessed 2 May 2013); and R.W. Jastram, Silver: The Restless Metal, NewYork, 1981, Table 15 and App. C; reproduced by Clark and Lindert, online at h^p://gpih.ucdavis.edu/files/England_1209-­‐‑1914_(Clark).xls (accessed 3 May 2013). From 1816onward, the exchange rate was compiled from Anon., ‘Precios corrientes’, p. 60.; J.Schneider, O. Schwarzer, and M.A. Denzel, Währungen der Welt, VII, LateinamerikanischeDevisenkurse im 19. und 20. Jahrhundert, Stu^gart, 1997, pp. 212-­‐‑18; and M. Balboa, ‘La evolu-­‐‑ción del balance de pagos de la República Argentina, 1913-­‐‑1950’, Desarrollo Económico, 12:45,1972,  p.  160.

86. Weights  and  measures  come  from  Tornquist,  Economic  Development,  pp.  325-­‐‑28.87. International Monetary Fund, Producer Price Index: Theory and Practice, Washington, DC,

2004,  pp.  566,  593.88. The geometric mean has been preferred due to its mathematical properties. See R.J. Hill and

K.J.  Fox,  ‘Splicing  Index  Numbers’,  Journal  of  Business  &  Economic  Statistics,  15:3,  1997.89. When a series was not available for part of a subperiod, these weights were adjusted

accordingly.90. Nine goods were included in Brazil’s export price index. They were reweighted every 10

years according to the value of their exports. Calculated from Instituto Brasileiro de Geo-­‐‑grafia e Estatística, Estatísticas históricas do Brasil: Séries econômicas demográficas e sociais de1550  a  1988,  2nd  ed.,  Rio  de  Janeiro,  1990,  pp.  345-­‐‑56.

91. Britain: A.H. Imlah, Economic Elements in the Pax Britannica: Studies in British Foreign Trade inthe Nineteenth Century, Cambridge, MA, 1958, pp. 94-­‐‑98, Table 8; C. Feinstein, NationalIncome, Expenditure and Output of the United Kingdom, 1855-­‐‑1965, Cambridge, 1972, pp.T132-­‐‑32, Table 61; and J. Cuenca Esteban, ‘The Rising Share of British Industrial Exports inIndustrial Output, 1700-­‐‑ 1851’, Journal of Economic History, 57:4, 1997, p. 901, App. Table 1.France: United Nations, ‘International Trade Statistics 1900-­‐‑1960’, mimeo, 1962, Table 11,online at h^p://unstats.un.org/unsd/trade/imts/historical_data.htm (accessed 1 July 2014);and M. Lévy-­‐‑Leboyer, ‘L’héritage de Simiand: Prix, profit et termes d'ʹéchange au XIX esiècle’, Revue Historique, 243, 1970, pp. 108-­‐‑111, Table 5. Germany: W.G. Hoffmann, DasWachstum der deutschen Wirtschaft seit der MiWe des 19. Jahrhunderts, Berlin, 1965, pp. 606-­‐‑09,

  ’  

- 21 -

chained geometric Laspeyres index, using the weights shown in AppendixTable  2.93

The part-­‐‑proxy terms of trade derived from these export and import priceindices show a considerably greater improvement than has previously beensupposed. In Appendix Table 3 that is confirmed by comparing the new serieswith that found in Orlando Ferreres’ commonly used compilation of Argentinehistorical statistics. Whereas Ferreres found a 152 percent improvement from1810s to the 1900s, the new series suggests 441 percent. Moreover, if someadjustments are made to account for the falling trade costs for imports, theterms-­‐‑of-­‐‑trade boom appears even greater still. If it is assumed that high tradecosts meant that Argentina’s import prices were 100 percent higher than thecore’s export prices until independence in 1810, but then fell at a constant rateuntil they reached 20 percent of the core’s export prices in the first decade of thetwentieth century, the improvement from the 1810s to the 1900s increases to 771percent. Looking further back, the adjusted part-­‐‑proxy estimate suggests aneven greater boom, as it shows a 2,485 percent improvement from the 1780s tothe  1900s,  compared  to  1,451  percent  in  the  unadjusted  estimate.

To test whether such a boom could feasibly have occurred, in AppendixFigure 1 the adjusted part-­‐‑proxy estimate for Argentina is compared to Indone-­‐‑sia’s terms of trade, which, thanks to the work of the Dutch researchers men-­‐‑tioned above, is the only peripheral country to have a reliable own-­‐‑price terms-­‐‑of-­‐‑trade estimate that reaches back to the first half of the nineteenth century.94

As can be seen, the improvement in the adjusted part-­‐‑proxy estimate for Argen-­‐‑tina is similar to that for Indonesia. This suggests that the magnitude of theterms-­‐‑of-­‐‑trade  boom  suggested  for  Argentina  in  this  paper  is  highly  plausible.

Table 151. Italy: G. Federico, S. Natoli, G. Ta^ara, and M. Vasta, Il commercio estero italiano1862-­‐‑1950, Rome, 2011, pp. 228-­‐‑29, Tabella 7b. United States: various series compiled in D.A.Irwin, ‘Exports and Imports of Merchandise – Price Indexes and Terms of Trade: 1790-­‐‑2002’,in S.B. Carter et al, eds., Historical Statistics of the United States: Earliest Times to the Present:Millennial Edition, New York, 2006, online at h^p://hsus.cambridge.org/HSUSWeb/HSUSEn-­‐‑tryServlet  (accessed  20  November  2013)

92. Using exchange rates from Officer, ‘Dollar–Sterling Exchange Rates: 1791-­‐‑1914’ and ‘Bilat-­‐‑eral Exchange Rates – Europe: 1913-­‐‑1999’, in Carter et al, Historical Statistics, Series Ee618,Ee625, Ee626, Ee629, and Ee636; and M.A. Denzel, Handbook of World Exchange Rates,1590-­‐‑1914,  Farnham,  2010,  pp.  15-­‐‑28,  42-­‐‑43.

93. The use of such a proxy index is crude because it assumes that the composition of Argen-­‐‑tina’s imports from each of the six countries was similar to the composition of their exportsto all countries. Nevertheless, it is still preferable to the common practice of just usingBritain’s export prices as a proxy for a peripheral country’s import prices (see Francis, ‘Peri-­‐‑phery’s Terms of Trade’). How the six countries’ export prices were indexed is detailed inthe  Appendix.

94. Francis,  ‘Periphery’s  Terms  of  Trade’.

  ’  

- 22 -

Appendix  Figure  1

Terms  of  Trade  for  Argentina  and  Indonesia,  1780-­‐‑1938

0

20

40

60

80

100

120

1780 1800 1820 1840 1860 1880 1900 1920

1913 = 100

Indonesia

Argentina

(Adj. part proxy)

Sources:

Argentina:  See  the  text.

Indonesia:  Korthals  Altes,  Changing  Economy,  XV,  pp.  158-­‐‑60.

  ’  

- 23 -

Appendix'Table'1

Weights&in&Argentina’s&Export&Price&Index,&1780*1938

Base year: ... 1822 1837 1851 1866 1881 1896 1910 1925 1938

Subperiod:1780

to1822

1780to

1837

1822to

1851

1837to

1866

1851to

1881

1866to

1896

1881to

1910

1896to

1925

1910to

1938

1925to

1938

Hides, dried (1780+) 1.0000 0.7347 0.6971 0.6501 0.3438 0.2658 0.0579 0.0382 0.0182 0.0093

Hides, salted (1822+) 0.0880 0.0835 0.0779 0.0412 0.0409 0.0471 0.0471 0.0668 0.0587

Beef, jerked (1829+) 0.1222 0.1057 0.0967 0.0296 0.0577 0.0274 0.0029

Tallow and fat (1833+) 0.0435 0.0356 0.1348 0.0763 0.0275 0.0248 0.0293 0.0229 0.0103

Wool, dirty (1833+) 0.0116 0.0781 0.0164 0.4039 0.4899 0.3507 0.1633 0.0840 0.0998

Cattle (1864+)* 0.0193 0.0210 0.0899 0.0130

Sheep skins, dirty (1864+) 0.0242 0.0858 0.0871 0.0453 0.0246 0.0063 0.0075

Wheat (1878+) 0.0002 0.1193 0.2004 0.2345 0.1491

Maize (1879+) 0.0078 0.1487 0.1672 0.1418 0.1467

Flour (1880+) 0.0022 0.0181 0.0137 0.0154 0.0083

Linseed (1887+) 0.0638 0.1238 0.1064 0.1473

Goat skins (1893+) 0.0070 0.0036

Barley (1910+) 0.0004 0.0036 0.0149

Beef, chilled (1910+)* 0.0033 0.0853 0.1352

Beef, conserved (1910+) 0.0059 0.0202 0.0364

Beef, frozen (1910+) 0.0953 0.0581 0.0271

Bran (1910+) 0.0125 0.0073 0.0129

Butter (1910+) 0.0050 0.0251 0.0072

Oats (1910+) 0.0226 0.0204 0.0184

Quebracho extract (1910+) 0.0123 0.0220 0.0280

Quebracho logs (1910+) 0.0156 0.0033 0.0034

Rye (1910+) 0.0000 0.0004 0.0003

 ’  

- 24 -

Appendix'Table'1'(cont.)

Base year: ... 1822 1837 1851 1866 1881 1896 1910 1925 1938

Subperiod:1780

to1822

1780to

1837

1822to

1851

1837to

1866

1851to

1881

1866to

1896

1881to

1910

1896to

1925

1910to

1938

1925to

1938

Sugar (1910+) 0.0000 0.0000 0.0009

Cotton (1914+) 0.0045 0.0099

Sheep skins, treated (1914+) 0.0039 0.0015

Casein (1916+) 0.0037 0.0029

Guts, salted (1916+) 0.0038 0.0021

Mutton (1916+) 0.0261 0.0275

Offal, frozen (1916+) 0.0055 0.0093

Wool, clean (1916+) 0.0069 0.0068

Wool, washed (1920+) 0.0035 0.0184

Total: 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000

* Prior to 1910, the price of caCle is used as a proxy for the prices of chilled and frozen beef, which is reflected in the weight given to caCle until

that&year.

Note: The year after each good indicates the year in which is price series begins. When a weight of 0.0000 is given, it indicates that the product

was&included,&but&the&weight&given&was&less&than&0.01&percent.&The&sum&of&the&weights&may&not&equal&one&due&to&rounding.

Sources:

The&base&year&weights&were&calculated&from&the&following&sources:

1822,&1837,&1851:&W.&Parish,&Buenos'Ayres'and'the'Provinces'of'the'Rio'de'la'Plata,&2nd&ed.,&London,&1852,&pp.&353*54,&Tables&1&and&2.

1866,&1881,&1896:&Cortés&Conde,&Halperín&Donghi,&and&Gorostegui&de&Torres,&‘Evolución&del&comercio’,&pp.&66*68,&Cuadro&3.

1910:&Bunge,&Intercambio'económico,'pp.&314*18.

1925,&1938:&Vázquez*Presedo,&Estadísticas'históricas,&II,&pp.&194*221.

 ’  

- 25 -

Appendix  Table  2

Weights  in  Argentina’s  Proxy  Import  Price  Index,  1780-­‐‑1938

Base year: 1825 1850 1870 1890 1910 1930

Subperiod:1780

to1850

1825to

1870

1850to

1890

1870to

1910

1890to

1930

1910to

1938

Britain (1780+) 0.6250 0.4639 0.3674 0.5194 0.3727 0.2710

United States (1790+) 0.1406 0.1031 0.0814 0.0836 0.1650 0.3016

France (1809+) 0.0859 0.2577 0.3630 0.1786 0.1147 0.0823

Brazil (1821+) 0.1484 0.1134 0.0955 0.0301 0.0310 0.0565

Italy (1862+) 0.0619 0.0479 0.0778 0.1083 0.1277

Germany (1880+) 0.0448 0.1105 0.2083 0.1608

Total: 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000

Note: The year after each good indicates the first year of its export price index. Thesum  of  the  weights  may  not  equal  one  due  to  rounding.

Sources:  

1825 and 1850: W. Parish, Buenos Ayres and the Provinces of the Rio de la Plata, 2nded.,  London,  1852,  p.  361.

1870:  R.  Napp,  La  República  Argentina,  Buenos  Aires,  1876,  p.  ii.

1890: F. Layina, Estadística retrospectiva del comercio exterior argentino 1875-­‐‑1904,Buenos  Aires,  1905,  pp.  220-­‐‑23.

1910 and 1930: DGEN, Anuario del comercio exterior de la República Argentina corre-­‐‑spondiente a 1937 y noticia sumaria del período 1910-­‐‑1937, Buenos Aires, 1938, pp.lxxxviii-­‐‑cv.

Appendix  Table  3

Three  Estimates  of  Argentina’s  Terms  of  Trade,  1780s-­‐‑1900s

Ferreres

New

Part-proxyAdj. part-

proxy*

1780s 6.4 3.9

1810s 39.7 18.5 11.5

1830s 68.3 44.8 31.0

1870s 76.8 79.0 68.6

1900s 100.0 100.0 100.0

Growth, %:

1780s to 1900s 1,451 2,485

1810s to 1900s 152 441 771

* Based on the assumption that Argentina’s import prices were 100 percent higherthan the core’s export prices until 1810, but then fell exponentially to 20 percent inthe  1900s.

Note:  All  three  estimates  were  referenced  so  that  1900-­‐‑09  equals  100.

Sources:  Ferreres,  Dos  siglos,  Table  8.1.7;  and  the  text.

  ’  

- 26 -

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Balboa, M., ‘La evolución del balance de pagos de la República Argentina, 1913-­‐‑1950’, DesarrolloEconómico,  12:45,  1972,  pp.  151-­‐‑72.

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